TMFDeej (99.21)

Thoughts on this morning's news from the "Retina Wrecker" aka Bloomberg

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Good morning everyone. As a business news and economics junkie (I know it's lame, but I can drink more than you so it balances out), I love Bloomberg. I listen to Bloomberg radio on my drive to work and I regularly read its website. Is it just me, or does the yellow text on black background that Bloomberg uses on the front page of its site feel like it is burning out your eyeballs when you read it. Every time I open the site while enjoying my morning coffee it feels like it is burning a permanent impression on my retinas, sort of like an old monitor on a computer with no screen saver.

Oh well, on to a few news items from Bloomberg that caught my eye this morning.

GE Capital Loss Lurking in Moscow Loans, U.S. Cards - This is the sort of garbage that I was taking about when I panned GE Capital's bonds the other day (see article: Barron's is pumping the heck out of GE Capital bonds, but I'm not buying it). The yields on GE Capital bonds could not be high enough for me to hop into this black box. Who knows what sort of crappy loans GE Cap has on the books. We all know that it has credit card debt (not even real credit cards that people will be more likely to try to keep open, but store-specific cards), mortgages, commercial real estate that could end up being pretty bad and that it made terrible loans to poorly run companies like the now bankrupt Steve & Barry', but look what sort of other junk it has on the books. Eastern Europe mortgages?!?! Russian auto loans?!?! Subprime U.K. mortgages?!?!? Are you kidding me? No thanks. The yields on GE Cap aren't nearly high enough for me to mess with that sort of stuff.

Fed Wrestles Over How to Inject Credit Into Economy - More about the debate within the Federal Reserve about whether to purchase Treasuries. I touched upon this subject in my previous blog post: Will the Fed start to buy Treasuries? Definitely check out this article. It provides a ton of great background information on what the Fed is doing to try to prop up the economy. Also, keep your eyes peeled for the FOMC's statement at 2:15 today. I am doubtful that it will announce that it is starting an official Treasury buying program, but if it does it would likely have a significant impact upon interest rates.

Bank of England Votes Unanimously to Print Money - As I have said numerous times in the past, in the land of the blind the one-eyed man is king. There are good reasons why the U.S. dollar should fall, the problem is that there are better reasons that most other currencies should fall more. There seems to be a global race to see who can devalue their currency the fastest and the United States is clearly losing. Some day the chickens may come home to roost and the U.S. dollar could fall off of a cliff, but for now I expect it to remain fairly strong in relation to most other currencies.